Speaker 1: If you enjoy the Bloomberg Surveillance podcast, check out our
Speaker 1: new daily news program, the Bloomberg Daybreak Podcast. It gives
Speaker 1: you the day's top stories with context in just fifteen minutes.
Speaker 1: Look for it in your podcast feed by six a m.
Speaker 1: Eastern every morning. Subscribe on Apple, Spotify and anywhere else
Speaker 1: you get your podcasts, and stay tuned for a sample
Speaker 1: of today's edition of Bloomberg Daybreak at the very end
Speaker 1: of this podcast. This is the Bloomberg Surveillance Podcast. I'm
Speaker 1: Tom Keene, along with Jonathan Farrow and Lisa Abramowitz. Join
Speaker 1: us each day for insight from the best and economics, geopolitics,
Speaker 1: finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple,
Speaker 1: Spotify and anywhere you get your podcasts, and always on
Speaker 1: Bloomberg dot Com, the Bloomberg Terminal, and the Bloomberg Business App.
Speaker 1: It is a joy after pandemic that Abby Joseph Cohen
Speaker 1: dark in the door of our surveillance schools so a studio,
Speaker 1: I should say she is not with Goldman Sachs. It
Speaker 1: is a whole new world after all for the former
Speaker 1: Goldman Sachs partner professor at Columbia Business School and joins
Speaker 1: us after giving out bushels have ceased this term. Wonderful
Speaker 1: to have you in the studio. Abby once again, it's
Speaker 1: an abby Joseph Cohen market, and that you have to
Speaker 1: believe in optimism on the American economic experiment and within
Speaker 1: all the caution in gloom, equities will rise. Is this
Speaker 1: a bull market off the October lows? And is it
Speaker 1: a better time I had for the stock market?
Speaker 2: There are quite a few questions embedded in their tom
Speaker 2: and let me just say, I'm delighted to darken your door,
Speaker 2: so thank you for the invitation. I believe that what
Speaker 2: we're seeing is that investors are thinking differently than many
Speaker 2: of the talking heads. Many of the people who are
Speaker 2: required to make daily comments about what's happening. I think
Speaker 2: overreacted in some way to daily data or monthly data
Speaker 2: and forgot to look at things in context. So, for example,
Speaker 2: Michael did a great job of saying, here's where inflation
Speaker 2: is now, and let's put that in the context of
Speaker 2: where it was a year ago. And what we basically
Speaker 2: see is that that inflation is coming down. It takes
Speaker 2: pressure off of the FED to continue to raise interest rates.
Speaker 2: The other thing that we're seeing in the data, not
Speaker 2: necessarily every week or every month, is that there is
Speaker 2: ongoing economic growth in the United States. It has been
Speaker 2: surprisingly good, but not relative to consensus expectations, but not
Speaker 2: really a surprise when you think about the strength of
Speaker 2: the consumer. When the Fed began to raise interest rates
Speaker 2: more aggressively more than a year ago, the household balance
Speaker 2: sheet was in the best condition we have ever seen.
Speaker 2: Credit was in very good shape relative to income levels.
Speaker 2: And we also know that the employment situation has been
Speaker 2: good and has not really shown any deterioration. And in
Speaker 2: our US economy, that really is the base for economic growth.
Speaker 3: I wonder, especially on the heels of the CPI report
Speaker 3: that came in pretty much status quo, we are seeing
Speaker 3: some sort of disinflation. We also are still seeing that dynamism,
Speaker 3: with Wells Fargo CFO coming out this morning and saying
Speaker 3: that they're seeing an increase in card spending and real
Speaker 3: kind of strength there. You put these two together, do
Speaker 3: you now buy into the immaculate disinflation, this idea that
Speaker 3: you could get a new bull market and disinflation even
Speaker 3: if growth slows.
Speaker 2: I have been consistently in the camp that we would
Speaker 2: see some slowing in growth, but no recession, and that
Speaker 2: we could see inflation come down. And part of that
Speaker 2: is because I've had confidence in the FED that they
Speaker 2: would be paying careful attention to the data. And so
Speaker 2: when we think about what they may or may not
Speaker 2: do tomorrow, I think that they have the option to.
Speaker 2: I don't know if we're going to call it skip
Speaker 2: or pause. Let other people assign something to that. But
Speaker 2: the thing that I learned as an economist at the
Speaker 2: FED is we don't know how long it takes for
Speaker 2: monetary policy changes to actually affect the economy, and I
Speaker 2: think that they have already done so much. We already
Speaker 2: have an inverted yield curve. If I were voting, which
Speaker 2: I'm not, but if I were a voting member of
Speaker 2: the FOMC, I would vote for wait and watch well.
Speaker 3: And that seems to be what the consensus is.
Speaker 4: As far as as far as what.
Speaker 2: People are expecting.
Speaker 3: I am wondering as you advise the boards of public
Speaker 3: investment firms to try to understand how to position, would
Speaker 3: you say it's time to lean in, that it's time
Speaker 3: to actually bet on a broadening of the rally, that
Speaker 3: it's time to really understand that perhaps we're going to
Speaker 3: go back to something that's a lower yield reality.
Speaker 2: Yeah, I know that we're all focused on the fact
Speaker 2: that we're now back to where we were. I think
Speaker 2: the time to have made a really good decision was
Speaker 2: late last year or early this year, when everyone was
Speaker 2: so disturbed by what might happen and what I considered
Speaker 2: to be a low probability scenario. That was really the opportunity.
Speaker 2: And as I take a look at things now, I say, Okay,
Speaker 2: equity valuations are not as appealing to me as they
Speaker 2: were in November December because the pe has risen for
Speaker 2: the overall market. And so what I'm advising is balance
Speaker 2: Number One, we have an opportunity for the first time
Speaker 2: in ages in fixed income, and I would go with
Speaker 2: high quality, high quality corporates, treasuries and so on. You
Speaker 2: can get four or five percent return on a treasury.
Speaker 2: Not bad. Number Two in the equity market, I would
Speaker 2: be looking at some of the sectors that haven't performed well.
Speaker 2: You know, forty percent of the S and P five
Speaker 2: hundred roughly is it and communication, And these are the
Speaker 2: two sectors that have done so much better than the rest.
Speaker 2: So if you're concerned about relative valuation, there's some great
Speaker 2: opportunities in some of the more cyclical areas. And if
Speaker 2: people increasingly believe that there will not be a recession,
Speaker 2: that's where you start to look for opportunity.
Speaker 3: Just real quick here, do you think that the whole
Speaker 3: AI hype has been overplayed? That it's kind of starting
Speaker 3: to get a little concerning.
Speaker 2: I have been speaking to computer science professors and experts,
Speaker 2: and as I have an undergraduate degree in computer science,
Speaker 2: as ancient as that might be, and what they are
Speaker 2: basically saying is they're kind of nervous about how AI proceeds.
Speaker 2: There is the sense that if you put good data in,
Speaker 2: you'll get good results out. And what the scientists are
Speaker 2: saying is it's not true because the process that are
Speaker 2: being used are not really being properly regulated. They are
Speaker 2: advising pilot projects so we can see what happens. One
Speaker 2: of the common quickly time, if I may this Congress
Speaker 2: hasn't yet figured out how to regulate the Internet, and
Speaker 2: so we may be pretty far behind in terms of
Speaker 2: whether there should be some controls over AI. And I'm
Speaker 2: not talking about anything draconian. I'm just talking about guardrails,
Speaker 2: and our Congress hasn't yet figured out what to do.
Speaker 1: I got eight ways to go here, and I got
Speaker 1: forty seconds. Mister Costin at the shop downtown goes from
Speaker 1: four thousand to forty five hundred SPX. I don't want
Speaker 1: you to play the game he used to play at
Speaker 1: Goldman Sachs. But I do want you to tell me
Speaker 1: what the second leg of a bull market looks like.
Speaker 1: The first leg, as you alluded to, is easy money.
Speaker 1: What happens now in a second leg of a presumed
Speaker 1: bull market?
Speaker 2: Sure, I've been at that forty four to forty five
Speaker 2: hundred level since last December, so I'm not so in
Speaker 2: terms of what we have seen. So when I take
Speaker 2: a look now at David's forecast, which is very thorough,
Speaker 2: he's talking about an increase to about forty seven hundred,
Speaker 2: I think that's reasonable when I look at the profit outlook,
Speaker 2: and also what might happen to Peaes.
Speaker 1: Does Lee Boluncer and the rest of Columbia University know
Speaker 1: your game in the SPX off of Bloomberg terminal at school?
Speaker 5: Are you really doing that?
Speaker 4: I am not.
Speaker 1: You're not placing trades.
Speaker 2: I'm doing that at home, but.
Speaker 1: You're on the couch of the laptop at home. Had
Speaker 1: me Joseph Cohen on a day of inflation.
Speaker 6: Just check in with Sarah House. She's a senior economist
Speaker 6: at Wells Fargo. So, Sarah, we've had a couple of
Speaker 6: minutes here to digest this CPI data.
Speaker 5: What did you take away from it?
Speaker 7: Yes, So I think overall, when we look at the numbers,
Speaker 7: I think it's consistent with this inflation picture not getting
Speaker 7: any worse. In some ways we're seeing it maturely about
Speaker 7: or if you look at what's happening with the headline number,
Speaker 7: how that's stacking up against real average hourly earnings. But
Speaker 7: at the same time, when we look at the core numbers,
Speaker 7: there's still somewhat troubling. So we saw for a six
Speaker 7: consecutive month monthly increases of zero point four percent or higher.
Speaker 7: So still some work to be done on the part
Speaker 7: of the Fed.
Speaker 1: Well, the Fed's going to meet tomorrow. I know you're
Speaker 1: briefing Jr. Own Pal of twelve noon here, Sarah, how
Speaker 1: does this change the dialogue at the Federal Open Market
Speaker 1: Committee meetings?
Speaker 7: So, I don't think it changes the outcome of what
Speaker 7: was heavily signaled before going into the blackout period that
Speaker 7: the FED was likely to pause, skip, whatever you want
Speaker 7: to call it here in June. But I think it
Speaker 7: still keeps the door open to another hike in July,
Speaker 7: given that, yes, you have inflation coming down, but when
Speaker 7: you look at the core numbers that they're still troubling,
Speaker 7: troublingly high. So I think this is moderate enough to
Speaker 7: keep that compromise position going and buy J. Powell a
Speaker 7: little bit of time and hope that the numbers accelerate
Speaker 7: more clearly here over the next in intermeding period.
Speaker 1: Paul, and I see your read picker summing it up
Speaker 1: for Bloomberg News, and Bloomberg News reports slowest since March
Speaker 1: twenty twenty one. Okay, it doesn't get you back to
Speaker 1: now March of twenty twenty or even nineteen, but you know,
Speaker 1: I guess it's a move in the right direction exactly.
Speaker 6: So, I mean, Sarah, when we look at this, you know,
Speaker 6: ex Food and energy annualize at five point three percent,
Speaker 6: I mean again, that's that's higher than where the FED
Speaker 6: would like it to be. But put that in context
Speaker 6: with this two percent number that FED continues to throw
Speaker 6: out there is two percent of a realistic number these days,
Speaker 6: or would three percent be okay?
Speaker 7: So I think in terms of the official target, we're
Speaker 7: not going to see that change. So we have to
Speaker 7: step back and think. Okay, first, we're talking CPI numbers
Speaker 7: this morning, so that's probably more like two and a
Speaker 7: quarter versus the two percent, which matches a little bit
Speaker 7: better with with pc So I don't think we'll see
Speaker 7: a change in the official target. But I do think
Speaker 7: if we get down to maybe not three but somewhere
Speaker 7: closer to two and a half percent, I think that
Speaker 7: SID can live with that for a time if it
Speaker 7: means staving off a recession or at least mitigating the
Speaker 7: damage to the labor market. But I think this where
Speaker 7: you know where you're still looking at some numbers you know,
Speaker 7: at least double the fed's target by these consumer price
Speaker 7: index measures, whether PCE or CPI, that's still uncomfortably high
Speaker 7: for the FED.
Speaker 1: Key question. I don't want to get in trouble with
Speaker 1: Wells Fargo compliance, but we're going there anyway. Sarah House, good,
Speaker 1: do you extrap away the core CPI vector in a
Speaker 1: linear fashion where you get down to the level you
Speaker 1: just said a year out, two years out, two and
Speaker 1: a half years out, or can you get some form
Speaker 1: of convexity where we come down with greater rapidity. Can
Speaker 1: we pull that off?
Speaker 7: So I think we can see the pace of disinflation
Speaker 7: pick up over the remainder of this year and on
Speaker 7: into twenty twenty four. So one of the items propping
Speaker 7: up the core number today was a four point four
Speaker 7: percent gain in used vehicles. Don't expect that to last
Speaker 7: based on what's happening with the latest auction data as
Speaker 7: well as just what's happening in terms of the financing
Speaker 7: costs on consumers, what's happening on the inventory, the discounting side,
Speaker 7: and so between that and housing, I think you can
Speaker 7: get a much more discernible disinflationary path over the coming months.
Speaker 7: But I think in terms of getting it all the
Speaker 7: way back to that to two and a quarter percent
Speaker 7: rate that is on par with the fed's target, that's
Speaker 7: going to be probably a late twenty twenty four, maybe
Speaker 7: even twenty twenty five period. In terms of sticking that landing,
Speaker 7: you might hit it and bounce, but this is the
Speaker 7: landing is going to be about a year per one.
Speaker 1: Final question, this is the raving the raging question right now.
Speaker 1: I mean the form of Vice Chairman Richard Clareda says,
Speaker 1: forget about two point zero maybe there was a tailor
Speaker 1: rural reality of for years one point eight even we
Speaker 1: were subpar two percent for whatever reason you're saying that
Speaker 1: as a shop Wells Fargo says, two point x percent
Speaker 1: is just inappropriate and we have to have as a
Speaker 1: mission to get back to two point zero percent.
Speaker 7: I think that's the Fed's going to maintain that as
Speaker 7: they're in official target, but we think that they will
Speaker 7: implicitly be comfortable with something, you know, between two two
Speaker 7: and a half percent here over the next couple of years.
Speaker 7: That is going to be a multi year process to
Speaker 7: get inflation back down to where it averages two percent.
Speaker 7: But we think at the said we'll be able to
Speaker 7: live with something closer to two and a half percent,
Speaker 7: even if that official target is not going to change.
Speaker 1: When compliance call, Sarah, just you run them over to
Speaker 1: me and my cell phone, right, I'll be in this
Speaker 1: surveillance nap, but we'll straighten out that. That was very good,
Speaker 1: Sarah House. They're very delicate about some of the politics
Speaker 1: out there on this day of CPI and clearly an
Speaker 1: important day of inflation data in America and to be
Speaker 1: observed worldwide. It is good to speak to any Treasury secretary.
Speaker 1: Janet yellens occupied, So we'll do better with Jack glu
Speaker 1: the former US Treasury Secretary joins us this morning. Jack,
Speaker 1: thank you so much for joining Bloomberg and Bloomberg Surveillance.
Speaker 1: I'm gonna cut to the chase you were weaned on,
Speaker 1: Joe Moakley out of Boston and on the Great Tip O'Neill,
Speaker 1: and Tip O'Neill understood that technology drove things forward. He
Speaker 1: was a believer in the big system, the big vision.
Speaker 1: We come out of a pandemic, we have sky high
Speaker 1: inflation and the dynamics changing. Is this a normal inflation?
Speaker 1: Is this a normal dynamic that we should fear or
Speaker 1: can it lead to a better disinflationary trend, better productivity
Speaker 1: and better growth.
Speaker 8: So good to be with you, Tom, And I think
Speaker 8: it's fair to say that there's nothing normal about going
Speaker 8: into a coming out of COVID. It was an extraordinary
Speaker 8: period that required policies that no one had ever had
Speaker 8: to think about in our lifetimes before. So I don't
Speaker 8: think there's any surprise that coming out of it. It's
Speaker 8: a somewhat bumpy path with somewhat unpredictable duration in terms
Speaker 8: of where we're headed and how quickly we get there.
Speaker 8: I think what's clear is that there's been a trend
Speaker 8: down in inflation. You know, a lot of the inflation
Speaker 8: that was supposed to roll off slowly rolled off, But
Speaker 8: what's left behind is a lingering higher inflation rate. Then
Speaker 8: we would like. What we don't know is when all
Speaker 8: of the measures kick in, all of the higher interest rates,
Speaker 8: all of the effects of bank failures, where will we be.
Speaker 8: So I think the cautious approach is still the right one.
Speaker 8: We have room in the economy for some tightening. Unemployment
Speaker 8: is very low, we still have a strong but we're
Speaker 8: headed towards a slower patch. There's no question about that.
Speaker 8: And the question is will it or won't it become
Speaker 8: a technical recession. So I think that the data does matter,
Speaker 8: and I'm not sure today's news will be the last word.
Speaker 1: Jack lou the Painfully. My colleague John Parrell mentioned this
Speaker 1: on London and the rest of the United Kingdom in
Speaker 1: the last hour. There seems to be a separation in
Speaker 1: America to Americas that John Edwards talked about and advantage
Speaker 1: technology front America that really doesn't care about inflation, and
Speaker 1: then another America flat on its back. How separate are
Speaker 1: our two Americas now economically?
Speaker 8: You know, that's a good question, and I think there's
Speaker 8: lots of data points to show that it's a growing
Speaker 8: separation and a real problem. You know, you were talking
Speaker 8: a few moments ago about savings rates and what are
Speaker 8: the residual savings from pandemic support and from lower spending
Speaker 8: when people couldn't go out. It's very different if you're
Speaker 8: at the top or the bottom of the income spectrum.
Speaker 8: At the bottom that savings has been gone for a while.
Speaker 8: At the top, it isn't going away anytime soon. And
Speaker 8: I think that has a lot to do with what
Speaker 8: people can buy and what people can buy those things.
Speaker 8: So we do have to ask how different parts of
Speaker 8: the economy fairing.
Speaker 3: Although I do wonder how much the fiscal impulse is
Speaker 3: going to be severely constrained. Do you think that people
Speaker 3: appreciate how much the recent debt ceiling negotiations will constrain
Speaker 3: further fiscal spending or do you think that it basically
Speaker 3: was a band aid over something and basically didn't change
Speaker 3: the narrative in any way.
Speaker 8: So, Lisa, I think there will be lower spending on
Speaker 8: the appropriated side. That's going to have an impact on
Speaker 8: things that are very important in terms of providing services
Speaker 8: to the American people. So I don't want to say
Speaker 8: it won't have any fiscal impact. But the whole debate
Speaker 8: was over a small slice of the budget. It wasn't
Speaker 8: over revenues at all. It wasn't over the large entitled
Speaker 8: programs at all. So I don't think we should confuse
Speaker 8: the size of that deal, which was on the order
Speaker 8: of seventy five billion dollars a year for a couple
Speaker 8: of years of restrained spending, with what a true package
Speaker 8: of fiscal consolidation would look like. I think the question
Speaker 8: going forward is will there be continued stability in terms
Speaker 8: of the federal government not creating anxiety that affects both
Speaker 8: how individuals and businesses see the economic outlook. Part of
Speaker 8: the agreement was a kind of technical legislative provision to
Speaker 8: put pressure on Congress to pass all of the appropriation
Speaker 8: bills separately, which they haven't done since I was at
Speaker 8: a OMB and the Clinton years. Now, if that happens
Speaker 8: everything will go smoothly. If it doesn't happen, you face
Speaker 8: the prospect of government shutdown, of cuts in defense spending.
Speaker 8: The noise coming out of Washington in the last few
Speaker 8: days suggests to me that we're not necessarily done with
Speaker 8: drama coming from our capital.
Speaker 3: This is my shockface. I do think that people are
Speaker 3: expecting a bit more in terms of drama on this front.
Speaker 3: At the same time, when you talk about instilling some
Speaker 3: confidence in c suites of some predictability, I do wonder
Speaker 3: your response to future bank failures at a time when
Speaker 3: a lot of people are saying, basically, for all intents
Speaker 3: and purpose, there is a backstop at least depositors basically
Speaker 3: promised by the Treasury Department, and interference promised by the Fed.
Speaker 8: Well, look, I think they regulators and Treasury have made
Speaker 8: clear that they will do what they have to to
Speaker 8: prevent systemic crisis from occurring. They haven't been terribly clear
Speaker 8: whether that means in every single case. You know, there
Speaker 8: are continue to be normal workouts of troubled banks, so
Speaker 8: not everything is in the case of the regulators will
Speaker 8: step in. Look, I don't think we're done seeing the
Speaker 8: impact of higher interest rates on pressure on financial institutions.
Speaker 8: You add to that the pressure that comes from commercial
Speaker 8: real estate values being below where they were just a
Speaker 8: short period ago, So there's going to be some stress
Speaker 8: in the system. I think looking ahead, the thing that
Speaker 8: ought to happen is reflected in what policymakers have said,
Speaker 8: which is that there has to be more careful oversight
Speaker 8: of mid size financial institutions, particularly growing mid size financial institutions,
Speaker 8: so that we don't have as many surprises in the future.
Speaker 8: I don't know exactly what shape that will take, but
Speaker 8: I do think that's a very important discussion. And rolling
Speaker 8: back that oversight a few years ago I thought was
Speaker 8: a mistake at the time, and I was glad to
Speaker 8: hear that that thinking has changed back to we have
Speaker 8: to keep an eye on things.
Speaker 9: Jack. One final comment, We've got to say happy anniversary.
Speaker 9: It's almost ten years to the day that you unveiled
Speaker 9: a new signature. Can you believe that was a decade ago? Jack?
Speaker 9: Can you believe that was ten years ago?
Speaker 8: It is very hard to believe that it's ten years ago,
Speaker 8: isn't it amazing? T?
Speaker 1: And that's sure, is it's original, but it's changed.
Speaker 8: Go on, Jack, and I still get them when I
Speaker 8: go to the money machine that's.
Speaker 9: Old, the old ones Jack, or the new version with
Speaker 9: the new signature, you.
Speaker 8: Get a pretty good I only had one. There was
Speaker 8: only one signature.
Speaker 9: Oh so they never got the new that. They never
Speaker 9: got the new signature on that.
Speaker 5: I'd like a redo of this is possible.
Speaker 3: Can I just say that you've given my children hope,
Speaker 3: because they often will say when we're trying to develop
Speaker 3: a signature, they will look at yours and say, look,
Speaker 3: we can be creative with it.
Speaker 4: So literally, the only.
Speaker 8: Thing I say is, don't blame my grade school teachers.
Speaker 9: They try Jack Lou, thank you sir for being a
Speaker 9: good sport as well the former US Treasury secretary Jack.
Speaker 1: Right now, and this has been just a joy for
Speaker 1: us over the recent weeks. Wendy Schiller joins as director
Speaker 1: of Tubman Center, Brown University. Wendy were squeezed for time today.
Speaker 1: Let's just cut to the chase. It is truly an
Speaker 1: original moment. This is not in your classic textbook. How
Speaker 1: will you place a new chapter into your textbook?
Speaker 10: Well, in some ways I think that this is a
Speaker 10: development for the democracy. And if you're a Trump's borer,
Speaker 10: you say Oh, this is terrible and it's a political witchhunt.
Speaker 10: But if you think about it, why should presidents be
Speaker 10: shielded from behavior if it's criminal, whether it's federally criminal
Speaker 10: or bringing a state law when they're president.
Speaker 4: I mean, they should be held accountable. This is an
Speaker 4: evolution of where we are.
Speaker 10: Latin America, we know, you know, we don't want to
Speaker 10: be like them, but even Europe now, Nicole Sturgeon was
Speaker 10: held just the other day, you know, former leader of Scotland,
Speaker 10: for things she might have done, her husband might have
Speaker 10: done for their party.
Speaker 4: You know, democracies have to have a rule of law.
Speaker 10: And if you let the most powerful operator in the
Speaker 10: democracy break the law because they're insulated from prosecution when
Speaker 10: they're president, they're probably going to do that.
Speaker 4: And that's not something I think we want in the
Speaker 4: twenty fourth century.
Speaker 10: So I'm not as perturbed or disturbed by this.
Speaker 4: I don't think it's a political witch hunt.
Speaker 10: I am concerned that when Democrats get out of office.
Speaker 4: The same thing won't happen.
Speaker 10: But there's a there is a rule of law, and
Speaker 10: if you break the law, you need to be held accountable.
Speaker 3: There's a prosecution, and then there's the response publicly where
Speaker 3: people who are for the former president are still for
Speaker 3: him and do believe that this is some sort of
Speaker 3: undermining of the institutions. What's your takeaway from that when
Speaker 3: you teach your political history classes at Brown, Well.
Speaker 10: I mean political loyalty has turned into very fierce support
Speaker 10: and sometimes violence in the entire history of the country.
Speaker 4: That is not new.
Speaker 10: We have to see what happens today. How many will
Speaker 10: come out and go to a rally and you know,
Speaker 10: not that hot weather we think maybe in Miami today,
Speaker 10: But is that the same as you know, committing violence
Speaker 10: or trying to up end the system entirely just to
Speaker 10: save this one person. It's a larger problem for the
Speaker 10: Republican Party going down the line. They really in the
Speaker 10: end of the day, you know, McCarthy's answer was quite weak.
Speaker 10: You know, there's a bathroom lock. There's a lock on
Speaker 10: the bathroom door. That's you know, this is the espionage jack.
Speaker 10: These are military secrets. Is this man capable of being
Speaker 10: entrusted with national security? That becomes a larger issue as
Speaker 10: this trial proceeds for the Republican Party and those other
Speaker 10: people running for office in twenty twenty four, in the
Speaker 10: Republican Party.
Speaker 3: Putting aside Kevin McCarthy's response, you can come to whatever
Speaker 3: your conclusion that you'd like to come to. That there
Speaker 3: is an issue of at what point Republican nominees or
Speaker 3: potential nominees start to push back against what former President
Speaker 3: Trump is facing up against or starts to put a
Speaker 3: little bit more credence in the judicial system. Do you
Speaker 3: expect that to be the case or do you think
Speaker 3: that they're willant to you to be support and import
Speaker 3: around backing the former president and really kind of sticking
Speaker 3: with that line, Well, we.
Speaker 10: Said, that's that's the you know, very in question, and
Speaker 10: we have to ask themselves for the next couple of months.
Speaker 4: The question is in the polling, they've got to win
Speaker 4: the primary.
Speaker 10: I mean, this is the most devoted Republican voters, but
Speaker 10: a lot of independence in some states with open registration.
Speaker 4: Vote in the Republican primary. You know, they may be
Speaker 4: voted Republican before Trump. They've left Trump in majority.
Speaker 10: Numbers in the last couple of years, but you know, will.
Speaker 4: They vote Republican primaries? And if independent voters do do that.
Speaker 10: Right, they vote in Republican primaries, they're not going to
Speaker 10: want this guy, and how do you balance that?
Speaker 4: And then, of course in the general election, we know
Speaker 4: they're not going to vote for this guy.
Speaker 10: So this is the big question for those other people running.
Speaker 10: You don't want to alienate your core base of Trump supporters.
Speaker 4: On the other hand, other people vote those.
Speaker 10: Republican primaries too, and they're just going to get sick
Speaker 10: of this, especially if there's a Georgian indictment or January
Speaker 10: sixth indictment. You know, this guy just becomes too much
Speaker 10: of a liability and then you risk losing turnout in
Speaker 10: twenty twenty four among that base or Republicans.
Speaker 9: When do I have thirty seconds? What kind of legal
Speaker 9: representation does the former president have today?
Speaker 10: I think they were scrambling as of yesterday, so I'm
Speaker 10: not even quite sure. But then you have to ask
Speaker 10: you that question two is at what point does he lose.
Speaker 4: The capability of getting.
Speaker 10: The very best minds of the country and try to
Speaker 10: defend him. And let's not forget the judge. This judge
Speaker 10: sort of got in trouble for the way that she
Speaker 10: handled this case earlier in its proceedings.
Speaker 4: What does she do now and does she.
Speaker 10: Continue on that path or does she sort of more
Speaker 10: conform with regular judicial standards in the federal judiciary.
Speaker 9: Wendy Shella of Brown University. Wendy, We'll be tell Conceding,
Speaker 9: not down.
Speaker 1: Subscribe to the Bloomberg Surveillance podcast on Apple, Spotify, and
Speaker 1: anywhere else you get your podcasts. Listen live every weekday
Speaker 1: starting at seven am Eastern im Bloomberg dot Com, the
Speaker 1: iHeartRadio app, tune In, and the Bloomberg Business app. You
Speaker 1: can watch us live on Bloomberg Television and always. I'm
Speaker 1: the Bloomberg Terminal. Thanks for listening. I'm Tom Keen, and
Speaker 1: this is Bloomberg. Thanks for listening to the Bloomberg Saveillans podcast.
Speaker 11: Now.
Speaker 1: Stay tuned for today's edition of Bloomberg Daybreak. It's your
Speaker 1: daily news podcast, delivering today's top stories to your podcast
Speaker 1: feed by six am Eastern. It's all the news you
Speaker 1: need in just fifteen minutes. The Bloomberg Daybreak podcast. It
Speaker 1: starts right now Boom.
Speaker 12: From the Bloomberg Interactive Broker Studios. This is Bloomberg Daybreak
Speaker 12: for Tuesday, June thirteenth. Coming up today, Arranment Day in Miami.
Speaker 13: Former President Trump prepares to face charges in the classified Documents.
Speaker 12: Pro Wall Street braces for the latest inflation report as
Speaker 12: the Fed meets on interest rates.
Speaker 5: Apple and Oracle hit all time highs.
Speaker 12: And New York City offices hit a post pandemic milestone.
Speaker 11: Ukraine says it has liberated several villages from the Russians
Speaker 11: in recent days. Plus, New York City is looking for
Speaker 11: a new police commissioner. I'm michae Lebarr.
Speaker 5: More Ahead, John Stan Sharon sports.
Speaker 14: The Denver Nuggets have won their first NBA championship. The
Speaker 14: Subway Series begins tonight at City Fields.
Speaker 15: That's all straight Ahead on Bloomberg day Break, the Business
Speaker 15: news You need to starn your day in just one
Speaker 15: fifteen minute podcast each morning on Apples, Spotify, the Bloomberg
Speaker 15: Business app, and everywhere you get your podcasts.
Speaker 12: Good morning, I'm Nathan Hager and I'm Amy Morris. Here
Speaker 12: are the stories we're following today.
Speaker 5: It could be a tense day in Miami.
Speaker 13: Up to fifty thousand people are expected to turn out
Speaker 13: at the city's federal courthouse. That is where former President
Speaker 13: Donald Trump will enter a pleete of federal charges over
Speaker 13: his handling of classified documents. House Speaker Kevin McCarthy says
Speaker 13: the former president is being treated unfairly when compared to
Speaker 13: the current president.
Speaker 16: When you're looking now at a current president that has
Speaker 16: documents sitting behind, is his automobile in a garage that
Speaker 16: date all the way back to a senator that raises
Speaker 16: a lot. If you're charging one and not charging the other,
Speaker 16: you raid one house, but you don't raid the other.
Speaker 13: But Trump's former acting chief of staff mc mulvaney says,
Speaker 13: this case is different. How often have we seen you
Speaker 13: throughout our political history, throughout business history.
Speaker 16: It's really not the crime, right, it's the cover up
Speaker 16: that gets people in trouble.
Speaker 13: Watergate was not about the break in.
Speaker 7: It was about the cover up of the break in.
Speaker 13: Former acting White House Chief of Staff mc mulveney spoke
Speaker 13: with Joe Matthew on Bloomberg's Sound on Catch the program
Speaker 13: weekdays at one pm Eastern on Bloomberg Radio or listen
Speaker 13: on demand wherever you get your podcasts. Former President Trump's
Speaker 13: arraignment is set for three this afternoon in Miami.
Speaker 12: And we'll have much more on Donald Trump's day in
Speaker 12: court coming up shortly. But first we turn to the markets,
Speaker 12: both the S and P five hundred and Nasdaq one
Speaker 12: hundred are trading at their highest level since April of
Speaker 12: twenty twenty two. There's optimism the Fed will pause rate hikes.
Speaker 12: The Central Bank kicks off its two day meeting today.
Speaker 12: Also today we get the May reading on US inflation.
Speaker 12: Let's get more on that from Bloomberg's Michael McKee.
Speaker 17: Economists say consumer price inflation slowed in May, led lower
Speaker 17: by falling energy and automobile prices. This inflation in rent
Speaker 17: may finally show up, holding down the core rate. Meanwhile,
Speaker 17: base effects high inflation a year ago mean a big
Speaker 17: drop in overall inflation this year. At least that's the forecast.
Speaker 17: If analysts are wrong, however, watch out higher than anticipated
Speaker 17: inflation will change expectations for the FED policy decision due Wednesday,
Speaker 17: with officials divided over whether to raise rates or make
Speaker 17: no change. An inflation surprise would lead to big market moves.
Speaker 17: Michael McKee, Bloomberg Daybreak.
Speaker 5: Okay, Mike, thank you.
Speaker 13: And rates are also in focus in Asia, Bloomberg News
Speaker 13: has learned China is considering a broad package of stimulus measures,
Speaker 13: including interest rate cuts, to boost the world's second largest economy.
Speaker 13: Sources say that stimulus would include at least a dozen
Speaker 13: measures designed to support areas like real estate and domestic demand.
Speaker 12: And speaking of real estate, New York City has achieved
Speaker 12: a major post pandemic milestone. We get those details from
Speaker 12: Bloomberg's Jeff Bellinger.
Speaker 18: Office occupancy in the city top fifty percent for the
Speaker 18: first time since workplaces emptied out at the start of
Speaker 18: the pandemic. The security company Castle Systems provided the data.
Speaker 18: Castle calculates the number of workers entering buildings by tracking
Speaker 18: security card swipes. More workers returned to offices despite the
Speaker 18: city being engulfed in smoked from wildfires burning in Canada.
Speaker 18: Jeff Bellinger, Bloomberg Daybreak.
Speaker 13: All right, Jeff, thank you. Back to markets now. We're
Speaker 13: watching a couple of stocks trading at all time highs
Speaker 13: this morning. Apples at its highest level in more than
Speaker 13: a year, the latest sign of big tech reclaiming leadership inequities.
Speaker 13: The latest rally comes after Apple unveiled its Vision Pro
Speaker 13: mixed reality headset.
Speaker 12: And shares of Oracle also hitting records. They are up
Speaker 12: more than four percent and early trading after the company
Speaker 12: reported quarterly revenue that topped estimates. Bloomberg's Charlie Pellett has
Speaker 12: those details.
Speaker 19: Its signals the software maker's cloud business is benefiting from
Speaker 19: heightened demand for artificial intelligence workloads. Sales increase seventeen percent
Speaker 19: to thirteen point eight billion dollars in the fiscal fourth quarter. Analysts,
Speaker 19: on average estimated thirteen point seven billion. According to data
Speaker 19: compiled by Bloomberg, Oracle has focused on expanding its cloud
Speaker 19: infrastructure business to more forcefully compete with Amazon, Microsoft and
Speaker 19: Alphabet's Google, all of which have seen recent slowdowns.
Speaker 5: In New York.
Speaker 13: Charlie Pellett, Bloomberg Daybreak, Charlie Thanks. Shares of Intel are
Speaker 13: also on the rise. They are up more than one percent.
Speaker 13: Bloomberg News has learned Intel is among companies British chip
Speaker 13: designer ARM has been talking with about anchoring its IPO
Speaker 13: this year. ARM is looking to raise as much as
Speaker 13: ten billion dollars in its New York listing.
Speaker 12: On the flip side, Microsoft is under fire from US regulators.
Speaker 12: They're suing the tech giant to stop it from completing
Speaker 12: its acquisition of Activision Blizzard. The Federal Trade Commission wants
Speaker 12: a cord order to block the deal from going through
Speaker 12: until the agency's in house court can review the sixty
Speaker 12: nine billion dollar deal.
Speaker 13: Over in Europeamy, the boss at Barkley, says a reshuffle
Speaker 13: and its investment bank has top deal makers leaving cs Vencotta.
Speaker 13: Christians replaced the heads of his investment arm earlier this
Speaker 13: year as part of a shift to focus on Europe.
Speaker 13: He tells Bloomberg's David Weston the move is about looking
Speaker 13: ahead to the next decade of banking.
Speaker 9: It's not a shift so much as an expansion.
Speaker 20: It is to try to give more attention to Europe.
Speaker 1: Relatively speaking, the US remains critically important to US.
Speaker 13: Darkly, CEO of Kotta Christian is head of the world's
Speaker 13: largest non US investment bank.
Speaker 12: And one note on the airline industry. This morning, United
Speaker 12: is offering its pilots the biggest deal ever for a
Speaker 12: mainland US carrier. The airline is making a contract offer
Speaker 12: to pilots with incremental value in excess of eight billion
Speaker 12: dollars over four years.
Speaker 13: Time now to take a look at some of the
Speaker 13: other stories making news in New York and around the world.
Speaker 13: For that, we'rejoined by Bloomberg's Michael bar Good Morning, Michael.
Speaker 11: Good Morning. Nathan, New York City's police commisioner has abruptly
Speaker 11: resigned Ketchin Seole, the first woman ever to lead the
Speaker 11: New York City Police Department, announced their resignation by surprise
Speaker 11: and a letter addressed to the rank and file and it,
Speaker 11: Sewell wrote she has witnessed their compassion, heroics and selflessness
Speaker 11: on a daily basis, calling them hard working public servants.
Speaker 11: Former NYPD Chief of Detectives Robert Boyce credit Seule for
Speaker 11: working to reduce the city's crime rate on her watch.
Speaker 20: If you look at the numbers, the violence thumbers, they've
Speaker 20: come down dramatically, you know, twenty four percent reduction in shootings,
Speaker 20: fourteen percent reduction in home side thinks that she's done
Speaker 20: the way she's carried herself with a lot of duty families,
Speaker 20: a big loss that we're going to talk about for
Speaker 20: quite some time.
Speaker 11: Mayor Eric Adams issued a statement thanking her for her work.
Speaker 11: Officials in Lockport, New York, say one person died and
Speaker 11: multiple people are in the hospital after a boat cap
Speaker 11: size during a tour of an underground cavern system built
Speaker 11: to carry water from the Erie Canal. Police and fire
Speaker 11: crews were called to the Lockport Cave tours after authority
Speaker 11: say twenty nine people were aboard the boat when it flipped,
Speaker 11: sending them into the water up to six feet deep.
Speaker 11: Fire Chief Luca Quagliano.
Speaker 21: The boat can safely handle up to forty people. There
Speaker 21: was twenty nine on it at the time. Somehow, at
Speaker 21: the end of the cave or the destination at three
Speaker 21: hundred feet section there the boat became unbalanced and capsized.
Speaker 11: Chief Quagliano says Eleven people were sent to local hospitals
Speaker 11: with minor injuries. Secretary of State Anthony Blincoln says he
Speaker 11: hopes the Ukrainian offensive now underway will force Russian President
Speaker 11: Vladimir Putin into talks to end his invasion. Ukraine says
Speaker 11: it has liberated several villages from the Russians in recent days. However,
Speaker 11: a regional governor says at least three people have been
Speaker 11: killed and twenty five wounded after missiles hit civilian buildings
Speaker 11: and an overnight attack in President Zelenski's hometown. The governor
Speaker 11: of Illinois signed into law a bill that would prevent
Speaker 11: book bands in the state, the first legislation of its kind.
Speaker 11: Pat say Jack, who has hosted the hit game show
Speaker 11: Wheel of Fortune since nineteen eighty one, says he will
Speaker 11: retire next year. Say Jack, who is seventy six, says
Speaker 11: it has been a wonderful ride. Global News twenty four
Speaker 11: hours a day, powered by more than twenty seven hundred
Speaker 11: journalists nanalysts in over one hundred and twenty countries. Michael Barr,
Speaker 11: this is Bloomberg.
Speaker 5: Nathan Man sold a lot of vowels. Thank you, Michael.
Speaker 13: Time for the Bloomberg Sports Update, brought to you by
Speaker 13: Tri State Out.
Speaker 5: Are you good morning? John stash Out?
Speaker 14: Good morning, Nathan. The NBA season is over with a
Speaker 14: first time champion.
Speaker 5: Ain't it's over.
Speaker 10: Last?
Speaker 1: The world light is over fift to forty seven years
Speaker 1: and Denver Luggets can finally call themselves NBA champion.
Speaker 5: Back call on ABC. Denver meating Miami in Game five,
Speaker 5: ninety four to eighty.
Speaker 14: That's a score you used to see back in the
Speaker 14: nineteen nineties. It was that kind of a game, rugged defense.
Speaker 14: Both teams struggled to score. They combined to make only
Speaker 14: fourteen at a sixty three three pointers. They heat led
Speaker 14: for most of the night. Denver made a run fourth quarter,
Speaker 14: then Jimmy Butler got hot put Miami back ahead. But
Speaker 14: Butler would commit a costly turnover in the final minute
Speaker 14: Nikola Jokich Finals MVP led everyone in the playoffs in scoring, rebounding,
Speaker 14: and assists, first to ever do that the second June
Speaker 14: in a row, or they are celebrating in Denver. The
Speaker 14: Avalanche last year won the Stanley Cup and the Cup
Speaker 14: will be in the house tonight in Las Vegas. Golden
Speaker 14: Knights up three one on Florida. Also tonight, start of
Speaker 14: a two game Subway series at Cityfield. Luis Sevarino for
Speaker 14: the Yankees, who just had a two to four homestand
Speaker 14: Max Scherzer for the Mets, who lost eight of their
Speaker 14: last nine. The Mets have signed to former Yankee Luke
Speaker 14: Voit just released by Milwaukee Hill report the Triple A.
Speaker 14: Sakwan Barkley not reporting of the Giants mini camp this week.
Speaker 14: All eyes on July seventeenth, that's the deadline for the
Speaker 14: Giants to sign Barkley long term. If they don't, he'll
Speaker 14: either play for the ten million dollar franchise tag War
Speaker 14: sit out the season. The US Open tees off Thursday
Speaker 14: in LA and two former champions will play together, Brooks Koepka,
Speaker 14: who left the PGA Tour for Live and Rory McElroy,
Speaker 14: who was outspoken your is criticism johns Stashawer Bloomberg Sports.
Speaker 22: From coast to coast, from New York to San Francisco,
Speaker 22: Boston to Washington, DC, nationwide on Syrias exam the Bloomberg
Speaker 22: Business Appen Bloomberg dot Com.
Speaker 5: This is Bloomberg Daybreak. Good morning. I'm Nathan Hager.
Speaker 13: The city of Miami is bracing for potentially big crowds
Speaker 13: and the possibility of protest as former President Donald Trump
Speaker 13: gets ready to enter a plea two dozens of counts
Speaker 13: later today at the city's federal courthouse. For more, we
Speaker 13: are joined by Bloomberg News Senior editor Bill Ferries, who,
Speaker 13: as it happens, used to lead Bloomberg's bureau in Miami.
Speaker 13: It's good to speak with you again, Bill. Is the
Speaker 13: city you used to know ready for what's coming this afternoon?
Speaker 23: Thanks Nathan. Listen to mayor and the police chief for
Speaker 23: Miami Dade and the City of Miami have all said
Speaker 23: that they're prepared. They don't. They admit they don't really
Speaker 23: know what to expect. They estimated crowds could be anywhere
Speaker 23: from a few thousand to fifty thousand, depending on how
Speaker 23: many of the former president's supporters and his opponents all
Speaker 23: convene at that courthouse where the former president is expected
Speaker 23: to appear at three pm today.
Speaker 13: Let's talk about a little bit what we do know
Speaker 13: is going to happen. Walk us through what is expected
Speaker 13: when the president faces those charges this afternoon.
Speaker 23: Well, the first thing we'll be looking for really is
Speaker 23: who's with him. As you know and your listeners know,
Speaker 23: a couple of his key lawyers who have been guiding
Speaker 23: him through this process quit in the last week or so.
Speaker 23: So I think the first thing we'll be looking for
Speaker 23: when the president makes his appearances, who is alongside him,
Speaker 23: who is representing him? He needs to have, he needs
Speaker 23: to have lawyers who are authorized at the Florida Bar.
Speaker 23: So that's been I think a focus of the President
Speaker 23: and his allies over the last few days as he
Speaker 23: prepares for this. When he gets into the courtroom, he's
Speaker 23: going to have to presumably plead innocent. He said he's
Speaker 23: innocent to all thirty seven counts across seven charges, all
Speaker 23: relating to his storage of classified alleged storage of classified
Speaker 23: material at the mar A Lago resort.
Speaker 11: So and.
Speaker 23: After that, after that ends, well will get a better
Speaker 23: sense I think of the timeline of this court case,
Speaker 23: we do expect it to bleed well into next year's
Speaker 23: presidential primaries and possibly the election. And we're not expecting
Speaker 23: right now the president to necessarily address his supporters outside
Speaker 23: the courthouse. There's been talk that he will go back
Speaker 23: to his club in New Jersey and perhaps give a
Speaker 23: speech there. But everything, you know, we've never seen anything
Speaker 23: like this and anything as possible. So we'll be watching
Speaker 23: closely to see how the president moves forward.
Speaker 13: Apart from entering a plea today, Bill, are we expecting
Speaker 13: that we're going to get any glimpses either from the
Speaker 13: special counsel, the federal prosecutors for amounting this case, or
Speaker 13: from Trump's defense attorneys, whoever they may be, as to
Speaker 13: how this case could go forward in terms of the
Speaker 13: arguments that they might pursue.
Speaker 23: Yeah, I think, you know, in the case of former
Speaker 23: President Trump, there's always two sides to this. He obviously
Speaker 23: has always made a lot of his arguments against these
Speaker 23: kinds of things public. It's not clear that that will
Speaker 23: carry as much weight in the courtroom, but we will,
Speaker 23: I think from he and his lawyers get a sense of,
Speaker 23: you know, whether they're going to contest some of these
Speaker 23: some of the means, some of the evidence that the
Speaker 23: federal government is saying that they built up against him.
Speaker 23: We may get a sense of their strategy in terms
Speaker 23: of trying to drag the timeline, timeline of this of
Speaker 23: this case out, whether by calling for some of the
Speaker 23: classified material to be made public in the courtroom or
Speaker 23: other procedures. I mean, the former president has a history
Speaker 23: of trying to delay and drag out court proceedings, so
Speaker 23: I would expect we'll start to get a sense of
Speaker 23: that perhaps in the courtroom or when his lawyers leave
Speaker 23: and they issue some statements about how they feel the
Speaker 23: day has gone.
Speaker 13: Of course, we've seen the political impact already. Bill in
Speaker 13: our last minute here, we've heard Republicans defend the former
Speaker 13: president saying there's a double standard. At the same time,
Speaker 13: we're hearing from pretty powerful Republicans questioning the former president's
Speaker 13: electability now that he's facing these charges. How significant is
Speaker 13: that that we're hearing from the likes of John Cornyn
Speaker 13: questioning the former president.
Speaker 1: Yeah.
Speaker 23: I think there are some Republicans who were in Trump's
Speaker 23: corner as presidents, who are who want to move on,
Speaker 23: who think that maybe even if this is rallying the
Speaker 23: traditional base, the primary voters who backed Trump, that it's
Speaker 23: really going to do the Republican Party damage in the
Speaker 23: general election next year. So that's I think they're looking
Speaker 23: ahead to that with a big question mark. And you've
Speaker 23: seen a couple of Donald Trump's opponents in the primaries now,
Speaker 23: Nikki Haley and Tim Scott. I believe both kind of
Speaker 23: come out with some cautious words, cautious criticism of what
Speaker 23: they what they read in that indictment against the former president.
Speaker 23: So the tide has turned a little, but obviously he
Speaker 23: still has that big base of support to back to
Speaker 23: back him up.
Speaker 13: This is Bloomberg Daybreak Today, your morning brief on the
Speaker 13: story's making news from Walston to Washington and beyond.
Speaker 12: Look for us on your podcast b by six am
Speaker 12: Eastern each morning, on Apple, Spotify, and anywhere else you
Speaker 12: get your podcasts.
Speaker 13: You can also listen live each morning starting at five
Speaker 13: am Wall Street Time on Bloomberg eleven three to zero
Speaker 13: in New York, Bloomberg ninety nine to one in Washington,
Speaker 13: Bloomberg one oh six to one in Boston, and Bloomberg
Speaker 13: ninety sixty in San Francisco.
Speaker 12: Our flagship New York station is also available on your
Speaker 12: Amazon Alexa devices. Just say Alexa Play Bloomberg eleven.
Speaker 13: Thirty bus Listen coast to coast on the Bloomberg Business app,
Speaker 13: Serrius XM Channel one nineteen, the iHeartRadio app, and on
Speaker 13: Bloomberg dot Com.
Speaker 5: I'm Nathan Hager.
Speaker 12: And I'm Amy Morris. Join us again tomorrow morning for
Speaker 12: all the news you need to start your day, right
Speaker 12: here on Bloomberg day Break.
Speaker 23: He